Our prior post discussed the benefits and challenges of visibility in logistics. But WAIT! There’s more to it than just benefits. Carriers and shippers should also proceed carefully as they move into the era of visibility, and start asking the following questions:
- What are the legal implications of tracking and visibility, and how will it wind up taking dollars out of your pocket?
- What are the biggest concerns in times of claims, injury, and documentation of claims?
The biggest issue today that shippers have to worry about is freight loss claims, personal injury, and of course, liability!
Tamara Goorevitz noted that in the past year that have been a number of “NUCLEAR” verdicts in trucking litigation cases. “Examples of some of the awards that juries are making across the country in trucking verdicts include amounts like $51M, $35M, and event $178M. Maryland has a cap on non-economic damages, but is one of very few states with a cap. Most of these cases are liability/personal injury claims.
A question: How much liability are most truckers required to have? The minimum is that one must have 750K$ . Most have $1M of coverage for the carrier, because even though they did not cause the damage in many cases, they were present. Tamara notes that “I am a defense attorney! So I know what the other side is asking: Where will they get that money and how many motor carriers are there? We will go up the chain, and will go big. To keep yourself in business, there are plaintiffs attorneys that are finding out what transportation is doing, and trying to find the big deep pockets to pay damages like the $281M damage awarded in Texas – because the smaller carrier won’t be able to pay.”
An example of a typical case shows the categories of awards made. This is based on a truck accident on a highway.
- Past medical expenses – $20M.
- Future care – $35M.
- Past lost wages $23,000
- Pain and suffering (past) $15M.
- Future pain and suffering $15M
Other categories include “scarring and disfigurement, $12m, past loss enjoyment of life $8M, Future loss of enjoyment of life, $20M, and on and on. Juries are going “nuclear”, as when they hear a case and hear the injury, they are willing to go with whatever categories the plaintiff’s attorney comes up with, and whatever numbers they are attaching to them!
Goorevitz notes that “We are in a world of direct liability through channels. These cases are involving direct corporate liability, with the presumption that carriers are involved in negligent hiring of drivers, negligent training, supervision, retention, etc. The perception is that carriers are all cutting corners on safety for the almighty bottom line, and espousing the idea that this is a matter of dollars over lives. The idea of profitable transportation providers is something that is inherently “bad”. And these plaintiff lawyers will follow up with “we all know that these transportation corporations are all bad! How many of you have been on the road when a trucker drove into your lane and almost hit you!?” However, none of these plaintiff’s attorneys every bring up the fact that everything you wear, that you eat, that you use and buy at a store, came on a truck, and arrived there somehow. Or that the Amazon package that arrived at your doorstep had to travel a circuitous route to get there on a truck. They conveniently forget about this minor detail.
Part of the problem of course involves “Society’s Perception of Money”. The extreme media coverage of large salaries of high profile sports atheletes, movie stars, and CEO’s has blown the concept of money out of the water. Five years ago, if someone wanted $1M as a settlement – that seemed enormous. Now if someone wants $1M, the attitude is almost “where do we sign the check?” There is a different perception around lawsuits, almost as if settlements should be awarded like lottery winners.
Which brings us to the issue of Information Overload. Tamara notes that “We are battling what we need to know versus the availability of information. Good customer service brought about by transparency, tracking, and monitoring essentially equals bad legal facts. Despite your good intentions of wanting to know what is going on, and the more you try to control it, the worse it becomes in defending yourself if a lawsuit arises. You want to give good customer service, but the availability of data used in tracking can often serve to bolster the case against you. Sad but true.
This of course raises issues about privacy concerns. On the legal end, the more involved and the more you know about a particular load and what it is going to do – the worse it can be for the lawyer who is defending you. The more you know about it, the more information you have, the more sharing you have with partners, the better (so goes the argument). But what is also left out of this argument is that More information = Higher Duty of Care!
Tamara notes that “We now know where the driver is minute to minute, and that concerns me legally!” We don’t have enough time to deal with more sharing or data – because shippers are stating that they want this information, and they expect it. But because you share it with your shipper, and that you have this information, does it mean you should give it out to everyone? What is my Duty of Care? What is the standard legally that I am held to in terms of being held negligent? What would a reasonable company do in this situation?”
“These are all important questions to consider. For example, I know where the trucker is, and when he will arrive, and his breaks, and his routes, and how fast he is going. No situation where I have to delve into that as a shipper. I don’t control him, and never reasonably expect to call him and tell him he is over his legal hours. Am I creating a higher duty of care? It is changing! We are incorporating this all the time.”
Tamara also notes that “One thing I do know is plaintiff’s attorneys will be all over it, and will be excited about the information you have and what you know about it. Don’t just adopt it because it is available – but look at how you are getting that information. Trucker on Trucker tools can turn off the information – and it may be there but not shared with the broker. How you get that information and share it, requires that we begin to start thinking about questions like “do I need everything that is available, and what am I doing with it? Who am I sharing it with? I am assuming that people have training – can a broker negligently hire a carrier who will then go to a jury?” Are you exercising too much control over the load and the driver? If you have all this information – is it for the purpose of controlling? But if it is only information – just because it is available, do we really need it? There needs to be a policy about what we are going to do with it. Customer service that is good can also create bad facts that increase your liability. A load confirmation sheet will provide documentation that we are outside of the contract!
You shouldn’t need to know where it is, or if they don’t accept it. Great to be able to go back and have that information and understand what went wrong – but this also allows the shipper to blame the carrier. Having data in real-time is no problem with I’m expecting it to arrive. GPS shipment trackers can track freight over the globe, helping to avoid cargo theft, understanding where it takes place and seeking advice of areas to avoid. Pharma has specific products that can need monitoring, and having the controls on high value freight is required just to get insurance coverage! To back all of those high value loads – there is most definitely a need to understand where a shipment is and avoiding those areas that are not so safe. And across different modes, it also becomes important, as there are some docks in Los Angeles that are known for bribery among customs agents, and having truckers avoid those specific docks provides another level of control.
What makes the case for visibility even more compelling is that deliveries for big box retailers often have contracts with heavy financial fines for not delivering on time. Having a tracker can be helpful for a number of reasons: knowing ahead of time if you will be delayed, tracking how long you have to wait wait, and being able to document from a legal viewpoint if the delivery is counted late and having an argument that you arrived on time but were made to wait. Lawyers are largely concerned about risk assessments and have discussions about what are acceptable risks. It is therefore important to begin to consider the legal considerations around visibility of transportation and make an educated decision on the acceptable level of risks. At what point does this customer request for information turn into control over our drivers and our operations, and how can we become the intermediary for information without relinquishing control. He who has the gold makes the rules! And shippers need to own the gold.